tv Prime Interest RT May 17, 2013 1:29pm-2:00pm EDT
merge about reporter is improper use of confidential data j.p. morgan itself is under fire for labs and risk controls last year has as bloomberg to provide confirmation of its controls allegations are swirling that the london whale story itself what the bloomberg broke last year may have been a result of an improper delivering of the leader data and goldman is using the opportunity to turn the screws on bloomberg broker dealer operations will be discussing bloomberg gave a link today in a special segment and in a live interview with christopher chambers how do you remember credit default swaps they were at the at the center of the a.r.g. goldman sachs bailout and pay off in two thousand and eight the the market for these insurance contracts and corporations and government is undergoing a make over a new proposal by the international swaps and derivatives association would change the rules about when the contracts pay out and the government tries to bail out a bank by forcing losses on bond holders instead of tax payer and the insurance
contracts on the bonds or the bank would pay out basically is an escalation of too big to fail so get out your popcorn as the players of the sixteen trillion dollar market do get out now let's get to what's in your prime interest. we've heard quite a bit about bloomberg lately. news and financial service company bloomberg caught
in the embarrassing situation the financial data company had allowed journalists to see some information about terminal usage of the post is it any one of bloomberg in their broker dealer make money off this information. so today we're going to break down what we've coined as bloomberg gate and explain what exactly is going on in bloomberg eight well this is the scandal much of bloomberg reporters used private data from the company's terminals to further their reporting it also involves the posting of thousands of bloomberg terminal messages online so what's a bloomberg terminal well as a computer system that allows users to access bloomberg data this includes real time financial data newsfeeds and messages and also facilitates the placements of trades the terminals are used by more than three hundred thousand francs all professionals payments for leasing the system cost about twenty thousand dollars per year this is a multibillion dollar business for bloomberg as believe that hundreds of bloomberg
reporters have had access to terminal data and according to the editor in chief of bloomberg news reporters could see a user's log in history and when a logon was created and secondly they could see high level types of user functions on an aggregated basis but without the ability to look into specific security information the story broke after a bloomberg reporter in hong kong contacted goldman sachs to ask about the employment status of an executive now the reporter mentioned that the executives a lack of reason terminal activity as a sign that he was no longer employed by goldman sachs goldman complained and the new york post reported on the story last friday but this story should have been news years ago back in two thousand and eleven of bloomberg news anchor alluded to the monitoring of the u.b.s. rogue trader the anger was reprimanded and executives say that they would no longer allow journalists to access the client data. moreover this week there was another
security breach with more than ten thousand bluebird terminal messages online these are messages that were voluntarily sent by clients to bloomberg as for news reporters access to the terminals are the privacy breach is a legal well according to fortune and several of the bloomberg terminals contracts state that the lease the knowledge is and understands the lease or made monitor it's only for operational reasons at least the general use of these services as for exactly what monitor and so we for operational purposes means it's not clear but one thing is for sure that this scandal has caused many wall street firms like j.p. morgan to reconsider its options meanwhile china's central bank that the i.c. and the fed have all inquired about data confidentiality issues and that's what's on the breakdown of bloomberg.
all right joining me now to discuss what we're calling the bloomberg a is christopher chambers he is a professional professor of critical media studies at georgetown university you doing great thanks for joining me a pleasure so first let's just jump into the privacy implications of this kind of cyber of data privacy issues you know our question here well this is one of these perfect storm kind of the things i mean you have the to the traditional classic sorts of things where you know you have data breaches i mean going back years such as you know with wellpoint and things like that then you have the other kind of ambit where it's big data mining people's personal information or facebook or google getting involved in. this is the third prong of this perfect storm and this
is business to business imagine a. world beyond that i mean imagine if you will i mean you know berkshire hathaway was downgraded today imagine if these guys. these terminals with access to information prior to the downgrade or all the machinations and issues going on afterward and the details of buffett's. plans for succession i mean do you see the implications of this i mean they have basically an eye or a bug in any of these terminals are we seeing any clients speak out about this well you know i mean well there's citibank obviously bank of bank of england. which is a big deal j.p. morgan i mean that's going to have a ripple effect now you have treasury sitting there asking what is going on with this you know because on smaller people who right now that are necessarily protected by their their strength in number or you know this is this implicates law
firms small c.p.a. firms that have at least some of the the depth of the money to get a terminal i mean that's a big deal that's a big feather in your cap well now it's being looked at as not only a security breach but money are you really you would want to spend that money on the potential security leak so you know it's filter on the now here's what it was yeah i mean and let's face it they do blend bridge the newsgathering part the journalism part with the terminals the terminals are the moneymaking. engine that fund the journalism so you have that aspect too so they're also they're kind of a hybrid organization and you know when you have a hybrid sometimes you get the wrong mix of the genetics bad bad things happen but we obtained a copy from court a contract between the city of california and bloomberg and it says that bloomberg has the right to monetary customer usage celie for operational reasons. i mean what
kind of legal implications could be at i mean that contract certainly have some kind of loophole in here if they're going to be legal well i think so i mean you're seeing that in terms of consumers and social media now you know when facebook and google everything on to you and i it's our job to police them in other words i don't think that's going to fly in the business world and this is the operational purposes language i think when you can always bust it open with fraud or lack of best practices and i think you know law firms small c.p.a. firms use a pal of these small city states are going to start looking at that as well as the federal government and i think they're going to try to bust these contracts based on a breach of the language you know of them basically saying that operational purposes means we can look at it any way you want and you know there's never any any protection in a contract for your employees going off on a merry lark and delving into private business information of
a collapse like that will advocate within the j.p. morgan case i mean they were looking at the london whale game where they lost three billion dollars i mean could it possibly be that it was a good thing that they caught as part of any bigger before. the failure well you know there's always that question i mean you know the ends justify the means or something good came of this well yes something good came of it but when you look at the balance of this it's it's almost like with the administration and the. hacking of the phone records of the subpoena the phone records yes they were trying to protect against leaks that possibly could endanger americans with in terms of yemen and terrorism but i mean come on i mean that's that's that's basically the kind of brittle shield they put up yes they found out about the london whale but think of all the other abuses that we might still find that are potentially if it's going to scare citi bank the bank of england ok j.p. morgan it's going to. and the treasury department there's something it's not
a smoke and fire thing it's a real structural weakness that has to be addressed well the c.e.o. of goldman sachs was interviewed on c c m b c or earlier yesterday and i want to play you know his comments of that interview. how much concern is there a goldman sachs which is a big user of bloomberg service isn't terminals with the competition we don't have a major concern we talk to bloomberg about a month ago we had numerous conversations with dan doctoroff dan is completely immersed in the situation he understands the magnitude the problem and i think they're really reacting in a positive way and addressing the issues that we might have had now these don't sound like i was that feeling then goldman is one of bloomberg biggest customers and you know there are talks that maybe something's going to get together and just start their own financial company is that possible that you're burying them well i mean there's you know there are two sides to every story and you know one side
triangle one side of the triangle is you know city citibank all these people are actually going to try to do a lot of the stuff in-house they don't want to rely on a bloomberg or a reed elsevier that owns lexis nexis successor etc so there is that aspect of it but i think the you know goldman sachs has been adept since they rule the world. basically soft peddling bad news and yeah there's soft total bad news very well and that you know i'm not going to say they're in bed with bloomberg and they're not but i mean i think that they haven't they now i don't think they're in bed with bloomberg i'm saying bloomberg has a thirty percent share of the financial data right it is going trying to take that this while go they want to become even bigger than has already been so i mean if you look if if a year from now. they have sold bloomberg is no longer exists that is. goldman sachs then we'll know what i mean but again city city. trying to create its
own financial. data base and. operation a lot of these bigger concerns are doing that i wouldn't be surprised if goldman sachs is thinking of it too but more in terms of what kind of an orange links are over not arm's length sorry arm in arm kind of thing with with bloomberg so i mean i think there are other but they're kind of covering for mr doctoroff right now you know and while everybody else is mad because everybody else is mad i mean what he said i understand what goldman's point of view is but when you look at what the bank of england says when you look at what citi is that and j.p. morgan you know and again j.p. morgan's a little jaded because of the way i think but thank you that was christopher chambers journalism professor at georgetown university. coming up next mark to market going to go toe to toe about apple taxes and the i.r.s. scandal and producer bob inglis and i will take on the fed officials who spoke
holds over one hundred billion dollars in profits overseas and money that they are and in other countries to bring this money back into the united states either for investment purposes or to pay their shareholders apple will have to pay the i.r.s. up to thirty five percent in corporate income taxes and this is money that was already taxed in the foreign countries in which it was earned because apple shareholders are soon to get discouraged at the following share price apple has promised to return one hundred billion dollars over three years to them instead of repatriating therefore to earn income apple is borrowing the money to take advantage of the federal reserve's low interest rate policies just recently apple borrowed seventeen billion dollars on the corporate bond market would just cheaper
than paying the corporate income tax. but can you blame them for doing this well i have with me mark. and mark calabria of the cato institute to give us the mark to market breakdown on our fall so is there anything illegal or immoral to what happens there is nothing illegal to what apple is doing apple is taking advantage of the united states tax system i think united states tax system has a problem and needs to be changed because what apple does is basically it goes to the lowest tax country can find join the british virgin islands which charges a very very low tax rate and keeps all its money there so it's not even paying the european tax rate or the chinese tax with other countries where it's going if we simply charge every country every company in america and appropriate rate it could be lower i mean if i were twenty five percent to repatriate funds in they'd come back in to be used to the economy they would have to go through these machinations and this illegal or immoral well it's not illegal and i don't think it is immoral either i mean we will agree the problem here is not necessarily companies or
individuals when you respond to incentives it's least well i think if you have bad people make bad decisions and so the problem is the tax code i would say in a broader level it's actually surprise you know up until this point. zero they haven't had since at least ten years first off since the ninety's and so it's also important that our tax code subsidizes debt increases there which actually fairly interesting if anything apple has money on the table in the past by not taking on debt in the same way other companies which again is not good behavior but i would be clear i'm not blaming apple i'm really blame of the u.s. tax laws and every corporation takes advantage of these and apple just is an example of why the tax code i think needs to be changed where one of the only countries that still operates on a worldwide tax system said is it time to to adopt the territorial tax system we already have the fact that corporations used to pay about eighty percent of the u.s. tax so now they pay about the u.s. taxes used to be a time thirty years ago and corporations when only a quarter of them didn't pay taxes today seventy percent plus of them don't pay
that's a very fact that eight years. fair to say they have a corporate income tax rate that's the number there just as hard as an ass corporation and they pass it as tash if not right they passed us having the time is rational if not of this corporation apple is a typical corporation a that all these companies are paying sure it is if you look at where they were thirty years ago the vast majority of us corporations pay taxes today the vast majority do not pay any taxes i mean that tax code gets unless it was really the tax because there always are a lot something like a couple of questions here and certainly will start with the fact that last year apple paid fourteen billion and taxes so it's not like they pay zero taxes they paid no effective overall corporate tax rate last year of twenty five percent so they paid taxes we can debate whether the level should be higher we can be lower and of course that's a separate question from and should be territorial now is a general matter i'm not a fan of what i would call american legal imperialism i don't think we should try to impress our loss upon the rest of the world whether it's taxes or whether it's
drug use or anything else if you're getting high in amsterdam i think that's your own business not the federal government's so now so again i think that these laws should be applied within the united states now as an economist most economists across the board pretty much agree that the actual burden of taxes is not borne by the corporation but is passed on to the shareholders passed on to the employees passed on to buyers of the products and such so again keep in mind corporation is a shell so somebody is going to be this for instance if you lower corporate tax rates won't actually increase share prices are going to go. going to go up so again i would rather prefer we get back to a level where the tax is actually focused on individuals rather than corporations because again corporations are passive in their role to efficient way of raising taxes i think it's ridiculous to argue to corporations are passed through it's like the people that argue corporations are persons no persons or persons compose operations are not persons things are composed of people the government is composed of people. we don't exactly government the way we tax people look at the end of the day what apple has done it's perfectly legal and i by the way it can't be twenty
five percent because twenty two thirds of their of their cash is held overseas it's not. if you calculated to behave myself this is going overseas then it would mean that two thirds of thirty five or so that's gone you're talking about ten percent but in any case seventy percent of u.s. corporations pay zero taxes and i'd be fine with lowering tax rates for. income taxes that's exactly what is paying those taxes given that it is on middle class variables other than being so security deal being so sex of the gender the teacher there being there is another question there is another question sense and compactness passed on to their customers he may not have too many even have a corporate income tax not passed on to there's a lot of people argue every time you tax a company say you can't tax a company didn't pass it on you don't you know get hundreds and hundreds of billions of dollars c.e.o.'s of the people running the company and that money could go from them there are trillions of dollars kept overseas that no corporation spends if you. only do what it would their properties you're also used to actually
i would do that for you the why don't do that rather than tax work right where we were going to get to one more topic this would not be attacked the conversation and we didn't address what's going on the i.r.s. right now and i have a letter senator lugar is asking resignation commissioner steven miller you know it said you know two years even see a response from the administration with something to comment on if they think that ministration and the president has responding to this appropriately steven miller of course wasn't around when this happened the person that was there was a bush appointee as it happened just doesn't make it doesn't make a difference because neither one of them knew about it was a witness and try to do the all what here's what steven miller did wrong ok all they did wrong is once he came into power and he learned what happened he should have informed congress about it that was a mistake and he's gone for that reason but let's not pretend that this was some you know obama conspiracy what happened were people in cincinnati were trying to get the politics out of these taxes which they should do what they should have done for left and right and not right alone that was their mistake they should have
basically made more companies kick them out progress. as well as consider the conversation of mike i worry that we get caught up in you know this bad person did this bad thing there's academic studies that have looked at the systemic evidence for instance if you live in a district of remember the ways and means committee you are statistically less likely to get audited than somebody who doesn't that's a fact that's statistical finding you know in so again we have seen organizations administrations repeatedly over time use the i.r.s. unfortunate mechanism in a political way so if i were to do it but still but there's no evidence that was done here in the answer is it should not be don't we agree that everyone should be treated equally under the law so why problems eighteen us c. five a one c four the thing that creates five one c four it is asians says are supposed to be used exclusively for social welfare building a school beautifying a park none of these lobbying political organizations left or right should be allowed to be tax exempt and i should note that the only one they forbid an attack that says to was a progressive or glass of wine what was my question to which they never made a decision on somebody and they sat you're right and i agree that was what he had
been going out of all this that's going on do you think it will act but i tag reform i mean i would hope it would because i would think a simpler tax code because again the i.r.s. employees and whether it's driven from the public i don't think we know one off to know what the white house or the treasury secretary to soon to know that now we do know that post citizens united max baucus for instance oversight of the i.r.s. sent a letter to the i.r.s. demanding more scrutiny of these organizations so again should be surprised that this happened but i want to resize but i think we're going to hear and more about this mark larry after kato and mark levine the host of them. thanks wayne thank you for and. time for the daily joining me prime interest producer bob inglis we're getting
closer i can almost feel the bitcoins in my head it's a little over happen. there. well we've had some very important economic data that came out today the consumer price inflation has actually printed out a negative point or monthly data just to be clear the yearly debt is still one point one percent it's positive and the fed is well under its two percent threshold so they can throttle till till kingdom come apparently so this is technically do you feel you should were thinking well at least on the monthly level but again you have to look at the yearly level and also the month to month figures they're pretty volatile so you'd have to look at an average i'm not too worried about being scared of deflation right now i don't think any of my bills went down but we know that the fed is closely looking at this data is that how they judge the q we saw in purchasing program and we're no fewer than five fed officials spoke today we're going to look at what each of them had to say and then we're going to label them either a hawk or a job and just to be clear of hawk or relative terms because it is our central
bankers after all so bear with us. so i guess let's get started we only have time for maybe one or two here we're going to start with richard fisher and he has traveled in the lead circles from vice chairman of henry kissinger's consulting firm to bush family bankers brown brothers harriman and he was even once assistant treasury secretary under carter but since two thousand and five he's headed the dells and just before q.e. two was launched in two thousand and ten two thousand and ten he actually said quote in my darkest moments i had begun to wonder if the monetary accommodation we have already engineered might be working in the wrong places so wrong places indeed pressure became a voting member two thousand and eleven he voted against some key language that year since then he has not putting member of his visions were closely monitored and today he delivered a very colorful speech titled enter fiscal policy oyo he said the current chairman ben bernanke he took the wheel at the fed just as we failed in two bernanke and the
fed but now the ship of the fed is in more benign waters. and assailing ford advocated that we begin to brief in the sales and with that he railed against what he dubbed a rudderless fiscal policy concluding against congress i argue that the fed is at best pushing on a string and at worst building up killing for a massive shipboard fire of eventual inflation so period for doug i appreciate when you can recognize that the fed is pushing on a string by the end of the day it seems like you've capitulated to a fed policy they look like and i got to say on relative terms he's a hawk that's what the control room has a judge. well i think we'll get to some more tomorrow and this was great talking with you about paulson and we'll be back tomorrow.
and it was a scandalous day here on prime interest out of the gate we broke down bloomberg gate we were shocked shocked to find a broken chinese wall angry bondholders took on bail happy governments looking ahead to financial crisis to point out mark to mark took a bite out of apple tax cheat or shareholder you decide and it's curtains for the acting i.r.s. commissioner but he would eat is here to stay at least for a little while thanks for tuning in we'll be back tomorrow as we finish reading the fed. and please follow us on facebook at facebook dot com prime interest from all of us that prime interest i'm terry and boring have a great night. real
damage and complexity of this oil spill was not something you can grasp just by looking at dirty birds we have between four to five million people in this directly affected area of the coast and it's pretty clear why it's not being reported because b.p. can't afford to have a reported all along the gulf coast are clean they are safe and they're open for business if b.p. is the single largest oil contributor to the pentagon the us war machine is heavily reliant upon b.p. and their oil this is a huge step backwards for the marker c. it's a step forward for oligarchy carex it is toxic is a look a lot like spraying in vietnam it was it was not a picture that either the government or b.p.
really wanted to have out there i don't want dispersants to be the agent on. all of this boils. down load the official application to yourself and choose your language stream quantity and enjoyed your favorites from alzheimer's if you're away from your television well it just doesn't matter now with your mobile device you can watch on t.v. anytime anywhere. is he to.
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